Renter’s insurance can be a touchy subject. For tenants on a budget, it can be viewed as an
unnecessary expense. After all, you as the landlord carry insurance, right? Why should they?
Statistics show that 60% of current tenants do not carry renter’s insurance. Here are five common
misconceptions that explain why.
1. Tenants believe coverage costs too much.
In reality, the average renter’s insurance policy is generally under $200 per year, and might be less than that depending on the area of the country. Places that are more prone to flooding, earthquakes, hurricanes and other natural disasters may be a little pricier, but still much cheaper than the average renter realizes. If broken down monthly, it’s cheaper than a meal out.
2. Tenants believe their belongings are covered by the landlord’s policy.
A landlord’s insurance policy covers the structure of the rental property itself—the walls, roof, trees on the property and more. However, too many renters believe that the landlord’s policy will cover their belongings, which is not true. Then, when disaster strikes, they are out of luck and get a crash course in what a landlord’s insurance policy will and will not cover. A surprising majority of renters, especially younger ones, don’t even know such protection exists.
3. Tenants believe their belongings aren’t worth insuring.
While it’s true that some people may not have much in terms of possessions, there are very few people who can afford to start from scratch if something were to happen. Even if a tenant has thrift store couches, there are most likely enough things inside the rental property that are worth insuring. From personal jewelry to TVs and computers to the cost of replacing an entire closet of clothes, the price tag to replace such items can be devastating for tenants who don’t have insurance.
4. Tenants don’t know that theft is covered by renter’s insurance.
No one expects to come home one day to find their home ransacked and all their electronics missing. What a relief to know that those items are covered by such inexpensive coverage.
5. Tenants don’t know that if they burn down the building, they are liable.
Yep. Your tenants are personally liable when their actions, intentional or not, cause harm to you or your other tenants. For example, if your tenant lives on the third floor and falls asleep while filling the bathtub which overflows, causing water damage to your premises and to his neighbors beneath him, he is liable for damages. If he had rental insurance, all damages would be paid out of the rental insurance. The liability, plus the extra protection for outside lodging if needed, is another benefit of the insurance that is above and beyond replacing some belongings.